March 17, 2006

India's rapeseed planted area seen up 2006
 

An increase of planted area for rapeseed is expected for India in 2006, the USDA said in its Foreign Agricultural Service report dated Mar 14.

This is due to higher returns from the previous harvest of rapeseed, the government's announcement of its intention to continue its rapeseed price support operations through the end of MY2005, and adequate soil moisture during sowing.

However, crushers indicate that the extreme cold weather in January may have led to a reduction in the seeds' oil content compared to the previous year.

Given augmented production during the current harvest, and an anticipated depressed market for rapeseed and mustard, USDA Post estimates MY2005 carry-over stocks at 2 million tonnes. 

According to trade sources, the national government procurement agency the National Agricultural Cooperative Marketing Federation--which procured about 2.5 million tonnes from the previous crop--may be holding stocks of 1.5 million tonnes. 

Post estimates that these stocks will be carried over to MY2005, adding to the downward pressure on open market prices. Currently, rapeseed is quoted at Rs16,700/tonne (US$380/tonne) in major markets, while government support price is Rs17,150/tonne (US$390/tonne). Trade sources expect prices to decline as arrivals peak during mid-March.

Post estimates that MY2005 oilmeal exports will increase to an estimated 3.4 million tonnes. The key to this 36-percent growth are soymeal exports, currently estimated at 2.6 million tonnes, which in turn are due to sagging domestic consumption, on account of a recent bird flu outbreak in one of India's major poultry growing areas, and to competitive prices as compared to South American supplies. 

Due to improved quality and competitive prices, Indian soymeal export destinations became more diversified in MY2006, with exports to new markets like China and Japan. MY2005 rapeseed meal exports are estimated to increase to 600,000 tonnes, due to increased demand from traditional markets and increased domestic production.

For the full USDA report, click here.